Has the Fat Lady Started to Sing for the So-called Legacy Applications?

Be it healthcare reform, requiring payers to use at least 80 percent of their premium revenues to pay claims, or the insurance exchanges driving competition to their doorsteps, the message to the U.S. health insurance industry is clear – either run your business efficiently, or go out of business. Now that will take some doing. Wouldn’t it?

What do you do with the plethora of those legacy systems that have been built over a period of 40 years and some of which still behave like they were stuck in 1970s? There have been some isolated efforts from some of the largest payers in the past few years to consolidate multiple platforms and migrate to agile and flexible platforms. ICD-10 migration could be the catalyst that could turn the slow trickle into an avalanche. Let’s examine the rationale behind that statement.

At the outset, it might appear that inflexibility of the legacy platform to adapt to ICD-10 could be the primary driver for such a migration. In other words, it might not seem like a good bargain to migrate, as long as it is not cost prohibitive to implement ICD-10 in the legacy environment. This is a very narrow and one-dimensional perspective.

Implementing ICD-10 the right way is really about transforming the business itself; it is about doing different things and doing things very differently than they are done today. Therefore, to get a broader sense of the opportunity, the following questions must be asked:

Is the legacy platform flexible enough to align with such a major transformation of the business itself?

Will the legacy platform be able to meet the organization’s objectives of its ICD-10 implementation?

Will the legacy platform play any part in making the “new” business processes efficient?

Will the current platform be able to accommodate the hundreds of new opportunities ICD-10 brings to the table?

Will it be cost effective to align the legacy platform to the new business model?

Will we need to migrate to a new platform in couple years post the ICD-10 implementation anyway?

Answers to these questions will provide insights that will make the decision-making comprehensive. I will go even further to state that even if the ICD-10 adoption for the legacy system is but a fraction of the cost of the system migration, it should be viewed from a cumulative perspective: how many such legacy systems can be replaced with a single new ICD-10 compliant system? what will be the long term maintenance cost associated with each of these systems? and where is one going to get resources to support them over a period of time (after all the COBOL and MUMPS programmers are not getting any younger) ?

Put all of these considerations together and I am pretty sure that in most cases that the message will be clear that “ICD-10 is indeed the perfect opportunity to migrate to cutting edge platforms.”